Independent Report on an investigation into complaint no AB CDE FGH against Huntingdonshire District Council February 2013

Investigation into complaint no AB CDE FGH against Huntingdonshire District Council

Table of Contents Page

Report summary 1

Introduction 2

Investigation 2

My concerns with this case 5

Conclusion 6

Key to names used

Mr A The complainant

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Report Summary

Subject

Mr A was put in a situation where his entire council tax liability for the year was demanded at

once. This led to a liability order being obtained through the Magistrates’ court. However, Mr

A was denied his rights to a fair hearing as the council erroneously informed him that he was

not entitled to be heard before Magistrates.

Bailiffs were then instructed who added fees totalling £162.50 of which only £24.50 were

legitimate. Mr A was then embroiled in several months of dispute involving numerous stages

of the council’s formal complaints procedure.

Finding

Maladministration, injustice possibly fraud identified referred to the SFO.

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Introduction

It is generally council policy that once its formal complaints procedure has been exhausted

the authority will not enter into further discussion or correspondence in relation to the issues

raised, no matter how incompetently they’re dealt with and wrong its findings. Because of this

there will be thousands of householders each year, who, after being caused injustice, are

unlikely to receive redress because of council policy to prioritise protecting reputation over

the rights of its residents.

Investigation

1. Mr A was put under pressure to pay the entire year’s council tax liability after the

authority withdrew the facility to pay by instalments. The council obstructed the

defendant from appearing before the court to make a payment arrangement; this is an

infringement of an individual’s human rights1.

2. A complaint was made to the council about why, after receiving a summons, he was

refused a hearing before Magistrates to put forward his case. He was told that the court

wasn’t involved and would need to contact the council to agree a payment arrangement.

3. The council was being obstructive even before the bailiff’s questionable fees were an

issue, as every householder has the right to attend the hearing and appear before

Magistrates in accordance with Article 6 (right to a fair trial) of the Human Rights Act

1998.

4. The complaint was not upheld but the procedure exploited by the authority’s Local

Taxation Manager as an opportunity to threaten further recovery action, which in this

case would be instructing the council’s bailiff contractor.

5. A liability order was obtained and the account passed to the council’s bailiff contractor.

6. The outstanding council tax was paid to the authority and the account cleared and Mr A

offered to settle the charge in respect of the first bailiff visit.

7. One of the charges incurred after the bill was settled was a fee for levying a vehicle.

Bailiffs are not permitted to pursue payment for their fees alone, but aside from this, Mr

A’s car was used for business purposes, i.e., his livelihood and exempt from a levy.

1 Every householder has the right to attend the hearing and appear before Magistrates in accordance with Article 6 (right to a

fair trial) of the Human Rights Act 1998.

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8. Documents were sent recorded delivery to the bailiff’s office (it would be discovered the

bailiff levied a random car). The bailiff claimed he could clamp the car and release it

only on receipt of payment, though admitted he was not allowed to remove it.

9. The MP for Huntingdon was contacted in October 2012 who then contacted the council,

escalating the complaint to the next stage of the procedure.

10. The MP replied 19 October and was satisfied with Huntingdonshire District council’s

response which stated the complainant was liable for the bailiff’s spurious fees. The MP

went so far as suggesting these should be paid as soon as possible – particularly

remarkable when the MP had been the Under Secretary of State for Justice and

headed the launch of a full public consultation on transforming bailiff action.

11. The complainant was dissatisfied with the response and detailed this in an email to the

council in November, raising a number of concerns including the unprofessional way

staff members dealt with enquiries – the legality of the judicial process as he was

denied the opportunity of presenting his case before the bench – the bailiffs threatening

to clamp his vehicle, and receiving neither notice that the bailiffs would be instructed

nor the liability order letter.

12. The November 2012 reply contained the defensive, sarcastic, arrogant and more

importantly factually incorrect guff which is typical in these responses.

13. The council held its position that the taxpayer had no entitlement to appear before

Magistrates. Its comments in regards clamping, whether or not factual were beside the

point due to the debt being settled several weeks before the levy, which for the same

reason made its lecture about cooperating with the bailiffs nonsense.

14. The bailiffs were asked to itemise all charges making up the £162.50 total, along with

the dates each was incurred. The charges were itemised in a letter dated 3 December

2012:

We would like to confirm that all fees have been raised and applied correctly in accordance with The Council Tax (Administration and Enforcement) Regulations 1992 – Regulation 45 (As Amended). Please find below a breakdown of debt and fees as requested:

Council Debt:

Visit fee 1:

Visit fee 2:

Levy fees:

Attendance to remove fee:

£xx.xx

£24.50

£18.00

£20.00

£100.00

1st October 2012

9th October 2012

12th November 2012

12th November 2012

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15. The council’s bailiff contractor went on to explain the charges, very much in general

terms using their own interpretation rather than the legally defined provisions in the

schedule of fees 2. The most creative and outrageous account was how the firm chose

to interpret the “attendance to remove” fee:

Attendance to remove: Once a levy has been performed, no

more visits are performed. Any further attendances to the property

are considered attendances with a van and as such you are

charged accordingly to the fee structure.

16. The letter also revealed the item levied was a vehicle. It is legally required to leave a

Notice of Distress when levying goods. The bailiff had not done this, though an alleged

copy was later produced by the council for the purpose of verifying that the bailiff had

levied a vehicle which did not belong the account payer.

17. It was also likely the bailiff used a pseudonym as the name on the notice was not on

the certificated bailiff register. Both the bailiff firm and the council refused to name the

bailiff when requested in subsequent complaints.

18. Documents were also sent to the council proving Mr A’s car was a tool of his trade. It

refused to resolve the matter and stated its bailiff contractor must be paid to avoid the

council adding this amount to the following year’s liability.

19. The council replied again on December 17, responding to new concerns raised after

the bailiffs supplied details of its actions. It continued defending its bailiff contractor,

stating the charges were legally correct and reasonable.

20. Still aggrieved by the council maintaining the fees were lawful, Mr A requested further

clarification. On 3 January 2013 the council explained why the bailiff continued

enforcement after the debt was settled. In its response it also inadvertently raised the

possibility that the vehicle was not the account holders.

21. The council stuck to its guns and continued defending the bailiff’s entitlement to fees.

2 Schedule 5 of the The Council Tax (Administration and Enforcement) Regulations 1992 – Charges connected with Distress

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My concerns with this case 22. The council violated Mr A’s human rights by preventing him appearing before

Magistrates to put forward his case at the liability order hearing. The council took the

liberty of deciding for the justices’ that a liability order should be granted against Mr A. If

only wanting to make a payment arrangement, the defendant should not be prevented

from appearing before the bench.

23. When Mr A paid the outstanding council tax and cleared the account, enforcement

should have ceased. Instead the bailiffs continued making visits and added charges to

the account to the tune of £162.50. They effectively used the liability order to enforce

payment for its visit made prior to payment being made to the council. This is unlawful

as the liability order is obtained by the authority to enforce council tax liability. Besides

which, the account payer offered to settle the charge in respect of the first visit but the

bailiff refused payment.

24. The council insisted the bailiff’s fees were paid even though Mr A informed them his car

was used for business purposes and the bailiffs were levying for their fees alone. This

has led to unnecessary time spent by all parties pursuing this issue and the question

now must be asked, just how many other residents this has happened to who have not

been this persistent in resolving their concerns.

25. It should not have been necessary to request an itemisation of fees. The National

Standards were breached in this regard as it requires this information is left with each

visit that incurs a charge.

26. The “attendance to remove fee” should never have been imposed. Schedule 5 of the

Council Tax Regulations intends this charge to cover out of pocket expenses for

attending with a vehicle and must be made “with a view to the removal of goods” so an

enforcement agent would need to arrive with sufficient transport for removal for

whatever is listed on the Notice of Seizure on a previous visit. This charge was listed as

the same day as the levy.

27. A previous LGO investigation focussed on complaints into bailiffs charging the fee

without first having levied goods. The Department of the Environment 3, Secretary of

the CBA 4 and Head of Revenue at CIPFA 5 agreed unanimously that the charge

should not have been made unless distress had first been levied. The bailiff firm’s

solicitor, after being consulted on the matter, concluded that no charge for removal was

due.

3 Now Department for Communities and Local Government (DCLG)

4 Certificated Bailiffs Association, now ESA (Enforcement Services Association)

5 Chartered Institute of Public Finance and Accountancy

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28. The legally required Notice of Distress was not left when the alleged levy took place.

Only a “removal of goods notice” had been left advising the bailiff had attended with the

intention of removing possessions as were necessary to discharge the debt and would

re-attend within “24 hrs and may remove goods even in your absence”.

Conclusion

29. Had outstanding monies been paid to the bailiff, they would have been entitled to take

their fees first. This would potentially have left an amount outstanding. Had those been

the circumstances, the bailiff may well have been entitled to continue enforcing, but

because payment was made to the authority direct, the liability was settled.

30. Huntingdonshire District council had not deducted and forwarded enforcement fees to

its bailiff contractor. If they had, this may have created a deficit. However, that in itself

would likely have been unlawful, unless the amount paid was over and above the

outstanding debt.

31. It was of no consequence who the levied vehicle belonged nor whether it was used to

earn a living, the taxpayer was unnecessarily being made to jump through hoops. It

was enough that enforcement should have ceased when payment was made in full

before the second attendance. However, the council subsequently revealed that the

vehicle was not the debtors and as a consequence removed the levy and attendance

fee leaving a balance of £42.50. This was in respect of the initial two visits; the second,

made after the debt was settled and the first for which the bailiff had already refused an

offer of payment.

32. After the 3rd October the bailiffs were enforcing for their fees, not the debt on the

liability order as that had been cleared. The council later produced an alleged copy of

the legally required Notice of Distress listing a vehicle not belonging Mr A which at best

proves the bailiff levied an arbitrary vehicle or may have been created as a means to

substantiate their actions were lawful.

33. Although it is not the Independent Local Government Ombudsman’s jurisdiction to look

into matters concerning fraud, we do however have a duty to pass details onto the

appropriate department when such issues are identified. As the concerns raised in this

investigation are common place and likely to be occurring on a much larger scale,

details will be passed onto the SFO who are the must appropriate organisation

equipped to deal with crimes which collectively must be netting millions of pounds each

year for enforcement firms.

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34. The council were clearly at fault and although the complaints process resulted in the

majority of fees being removed, this has caused unnecessary expense for all parties to

arrive at this point. I recommend a thorough investigation into Huntingdonshire District

council’s policies and procedures in its formal complaints, especially in connection with

grievances about bailiffs. We would also expect to be informed of all other similar cases

where complainants had not the perseverance and success in identifying

maladministration.

35. The (i)LGO is satisfied Mr A has suffered injustice. Merely having fees removed has not

remedied the injustice. He has been in continual dispute for months because of the

council’s intransigence. I therefore also recommend that the council award Mr A

financial compensation for an amount to be announced.